August 6 (Reuters) - Australian stocks tumbled 2.4% on Tuesday and looked set for their worst day over a year as the rapidly escalating Sino-U.S. trade dispute prompted investors worldwide to dump riskier assets.
Washington designated Beijing a currency manipulator following an unexpectedly sharp drop in the yuan on Monday, setting off further falls for battered global stocks. [MKTS/GLOB]
Australia's benchmark S&P/ASX 200 index <.AXJO> slumped 158.1 points to 6,482.2 by 0202 GMT. It has lost about 2.5% since last Thursday when U.S. President Donald Trump abruptly said the U.S. would slap 10% tariffs on $300 billion of Chinese goods.
China is Australia's biggest export customer.
"There are two words to describe market sentiment right now - panic and fear," said BK Asset Management in a note.
"The promise of global central bank easing is not enough of a reason to buy into this weakness and we will likely see the Asian indexes extend their respective slides into bear-market territory," said OANDA in a note to clients.
Australia's mining <.AXMM> and energy <.AXEJ> indexes gave up as much as 1.7% and 4.2%, respectively.
Mining major BHP Group <BHP.AX> declined as much as 3.1% to its weakest in over two months, while Fortescue Metals Group <FMG.AX> lost up to 7.1%.
However, rare earths miner Lynas Corp <LYC.AX> jumped as much as 7.1% and was among the top gainers on the benchmark. Its Malaysian rare earths processing plant's license is set to be extended, sources told Reuters.
Rare earths have been in focus since reports that suggested the minerals could be brought into the U.S.-China trade war. China is a major global supplier.
Oil and gas company Santos Ltd <STO.AX> fell to its lowest level in over five months, while bigger rival Woodside Petroleum <WPL.AX> hit an over seven-month low.
Heavyweight financial stocks also weakened, with the "big four" banks down as much as 2.5%-3.4%.
Tech stocks <.AXIJ> were the biggest percentage decliners, with data solutions provider Appen <APX.AX> down as much as 3.4%.
Gold stocks <.AXGD> were the lone gainers as wider market turmoil raised the metal's safe-haven appeal. Newcrest Mining <NCM.AX> gained as much as 3.2% to scale a near eight-year peak.
In New Zealand, the benchmark S&P/NZX 50 index <.NZ50> dropped 2% to 10,549.52 at 0200 GMT.
Electronic payment platform Pushpay Holdings <PPH.NZ> lost the most on the benchmark and hit an over four-month low.
(Reporting by Devika Syamnath in Bengaluru; Editing by Kim Coghill)
